When the Bureau of Labor Statistics announced earlier this week that employment numbers over the last year were off by the tune of nearly a million jobs, the question practically raised itself: Were the labor books being cooked?
In the midst of the Democratic National Convention, the BLS made a stunning announcement — namely, that its numbers had grossly overestimated the number of new jobs created from March of 2023 to March of 2024.
In an announcement on Wednesday, the BLS revised downward the number of new positions created by 818,000 — evidence, as Forbes pointed out, that the federal government had “far overestimated the recent labor market recovery.”
That slashed employment growth over the one-year period from 2.9 million non-farm jobs to 2.1 million.
Despite the huge cut, surprisingly, it could have been worse. Somehow.
“The massive revisions were due to the government’s recalibration to more precise quarterly unemployment claim data as opposed to the monthly surveys of employers which are used for initial monthly estimates,” Forbes noted.
“Economists anticipated a major downward revision Wednesday, with Goldman Sachs economists forecasting one of 600,000 to 1 million.”
However, the eye-popping number — particularly delivered in the midst of the Democratic National Convention — led itself to theories about why the BLS was so far off in terms of predicting new jobs created.
And, if you are conspiratorially minded, you might have noticed that the gross overestimation gave the Federal Reserve a green light to go ahead with a significant rate cut — something that would play favorably into Vice President Kamala Harris’ election chances.
As the U.K. Guardian noted, Harris’ hopes were “given a boost by mounting expectations that the US Federal Reserve will cut interest rates from as early as September.”
“After a rollercoaster month in financial markets amid fears of a potential US recession, a majority of economists polled by Reuters said they did not expect a downturn to materialize, and that the Fed would cut borrowing costs by 0.25 percentage points at each of its remaining meetings in 2024.”
Considering that the economy looms larger in polls than almost any other issue and inflation has abated — if not exactly receded — a rate cut would felicitously give a major boost to the Harris campaign.
The timing of the new data struck many, including conservative pundit Ben Shapiro, as suspicious.
“This is amazing for two reasons,” he wrote on social media.
“They’ve been lying for a year about Biden job creation … [and] They’re dumping this data just in time to justify a Federal Reserve interest rate decrease for the election.
This is amazing for two reasons.
1. They’ve been lying for a year about Biden job creation.
2. They’re dumping this data just in time to justify a Federal Reserve interest rate decrease for the election. https://t.co/p5D8aqT7EW— Ben Shapiro (@benshapiro) August 21, 2024
The media tried to spin the revision as something that was perfectly reasonable, however.
“Massive revisions have been fairly normal in recent years, as the government said last August it overestimated the job growth for the 12-month period ending March 2023 by 306,000 and in August 2019 it underestimated job growth for the period ending March 2022 by 462,000,” Forbes reported.
“There’s little reason to fret at the headline revision number, according to some economists,” it continued.
“Goldman economist Walker wrote ahead of the Labor Department report the 818,000 downward revision is likely ‘erroneous’ and ‘misleading,’ estimating the new forecast likely overstated the error by 400,000 to 600,000, due in large part to the methodology mostly excluding unauthorized immigrants, a group which strongly contributes to overall job growth.”
Leaving aside “unauthorized immigrants” being an even more novel euphemism for illegal immigrants than “undocumented persons,” this doesn’t quite capture the magnitude of the revision that was dropped earlier this week.
As Bloomberg noted, “a downward revision to employment of more than 501,000 would be the largest in 15 years and suggest the labor market has been cooling for longer — and perhaps more so — than originally thought.”
That hardly happens by accident.
What’s truly remarkable about that is that this revision downward came as Democrats met in Chicago to tout their economic record — which, as it turns out, doesn’t look quite as rosy as they made it out to be.
So Bidenomics didn’t work, despite the cattle call of speakers at the United Center who swore that the administration has created jobs. Will they face the music for this? No, of course not — because they’re counting on the deus ex machina of a rate cut this fall to save their collective hides.
And, as long as it helps Kamala win the election, it doesn’t matter whether it’s true or not.
